Zoetis Soars 2.5% on Earnings Surge and Optimistic Outlook: Is This the Start of a Bullish Rebound?

Summary
• Zoetis (ZTS) surges 2.53% to $146.69, breaking above its 52-week low of $139.34
• Q2 earnings beat by $0.14 and raised full-year guidance drive investor optimism
• Analysts upgrade forecasts, citing strong companion animal portfolio growth
• Options activity intensifies, with call options on 10/17 expiration seeing heavy volume

Zoetis Inc. (ZTS) is experiencing a sharp intraday rally, surging 2.53% to $146.69 as of 7:18 PM EDT. The move follows a Q2 earnings beat, raised guidance, and positive sentiment from analysts. With the stock trading near its 52-week low, the rally has sparked renewed interest in the animal health giant’s long-term prospects. The options market is also heating up, with key call options showing high leverage and liquidity, signaling potential for further upside.

Q2 Earnings Beat and Guidance Hike Ignite Zoetis Rally
Zoetis’ 2.53% intraday surge is directly tied to its Q2 earnings report, which beat expectations by $0.14 per share and raised full-year 2025 guidance to $6.30–$6.40 EPS. The company highlighted strong performance in its companion animal portfolio, which offset declines in Librela sales. Analysts, including William Blair, upgraded forecasts, citing Zoetis’ operational strength and market leadership in animal health. The rally also reflects optimism around the company’s pipeline and strategic focus on pet medicine education, as emphasized by the CFO in recent commentary.

Healthcare Equipment & Supplies Sector Mixed as Medtronic Gains
While Zoetis leads the healthcare equipment & supplies sector with a 2.53% gain, Medtronic (MDT) is up 1.35% on the same day. The sector faces broader scrutiny from the Trump administration’s Section 232 investigations into medical device imports, which could lead to tariffs on products like surgical masks and hospital beds. However, Zoetis’ rally is driven by earnings momentum rather than sector-wide trends, as its growth is tied to companion animal demand rather than regulatory or supply chain pressures.

Options and ETF Plays for Zoetis’ Bullish Momentum
• RSI: 29.74 (oversold)
• MACD: -2.6996 (bearish), Signal Line: -2.1808
• Bollinger Bands: Price at $146.69 near lower band ($139.597)
• 200D MA: $159.37 (price below)

Zoetis is trading in a short-term oversold condition (RSI: 29.74) and near its 52-week low, suggesting potential for a rebound. Key support levels include the 200-day moving average at $159.37 and the Bollinger Band lower bound at $139.597. The rally is driven by earnings optimism, but technical indicators like the bearish MACD (-2.6996) suggest caution for long-term buyers. Aggressive bulls may consider the ZTS20251017C150 and ZTS20251017C155 call options, which offer high leverage and liquidity.

Top Option 1: ZTS20251017C150
• Strike: $150, Expiry: 10/17
• IV: 25.17% (moderate)
• Leverage Ratio: 73.37% (high)
• Delta: 0.3665 (moderate sensitivity)
• Theta: -0.1645 (high time decay)
• Gamma: 0.04586 (high sensitivity to price moves)
• Turnover: 74,883 (liquid)
This option offers a balance of leverage and liquidity, ideal for capitalizing on a potential breakout above $150. A 5% upside to $154.02 would yield a payoff of $4.02 per contract, with a 132.56% price change ratio.

Top Option 2: ZTS20251017C155
• Strike: $155, Expiry: 10/17
• IV: 23.79% (moderate)
• Leverage Ratio: 225.75% (very high)
• Delta: 0.1625 (low sensitivity)
• Theta: -0.0884 (moderate time decay)
• Gamma: 0.0317 (moderate sensitivity)
• Turnover: 2,792 (liquid)
This contract provides explosive upside potential if Zoetis breaks above $155. A 5% move to $154.02 would result in a $0.02 payoff, but the 195.45% price change ratio highlights its speculative nature. Traders should monitor the 10/17 expiration for volatility spikes.

Action Alert: Aggressive bulls may consider ZTS20251017C150 into a breakout above $150, while ZTS20251017C155 offers high-risk, high-reward potential if the stock surges past $155.

Backtest Zoetis Stock Performance
Zoetis (ZTS) experienced a notable intraday surge of approximately 3% on December 30, 2022. Let's evaluate how the stock has performed since that day until now.The closing price of ZTS on December 30, 2022, was $142.66. After the 3% intraday surge, the price increased to $146.47. Since then, the stock has shown a general upward trend with some fluctuations. On August 26, 2023, the stock reached its highest price during this period at $165.71. The recent dip to $153.92 as of September 26, 2023, indicates a possible market correction or consolidation after the initial surge.In summary, ZTS has demonstrated a positive performance since the 3% intraday surge in December 2022, with a few notable peaks and a recent dip. Investors who held ZTS after the surge have generally seen their investment appreciate, although they have faced some volatility along the way.

Zoetis’ Rally Gains Momentum: Time to Act on Earnings-Driven Optimism
Zoetis’ 2.53% rally is a clear signal of earnings-driven optimism, with upgraded guidance and strong companion animal demand fueling investor confidence. While technical indicators like the oversold RSI and bearish MACD suggest caution, the options market is primed for further upside, particularly with the ZTS20251017C150 and ZTS20251017C155 contracts. Medtronic (MDT), the sector leader, is up 1.35%, but Zoetis’ earnings momentum positions it as a standout play. Investors should monitor the $150 level for a potential breakout and consider the high-leverage call options for aggressive positioning. Watch for a sustained move above $150 or a breakdown below $142.40 to confirm the trend.